Everyone prospers under health law

Just 12 months after the Patient Protection and Affordable Care Act became law, the American people are enjoying new protections, greater freedoms and lower costs.

Children are now protected from being turned away by insurers because of a pre-existing condition. Seniors enrolled in Medicare now have the freedom to get preventive care — such as mammograms and colonoscopies — for free. A Patient’s Bill of Rights is freeing families from some of the worst abuses of insurance companies, including canceling coverage when you get sick because of a paperwork error.

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Early signs show that, after years of decline, the number of small businesses offering coverage to employees is increasing.

Perhaps less widely recognized, but no less significant, has been the way the law is demanding transparency and accountability from the insurance industry to bring down premiums.

For too long, it’s been common for people receive a letter from an insurer announcing a premium increase of 20 percent to 25 percent, with little explanation and no recourse. That’s already changing.

During the past year, our department has provided states with almost $250 million in funding to strengthen their ability to review, revise or reject unreasonable rate hikes. New proposed rules would force many insurers to justify big increases and post explanations on the Web. States from California to Connecticut have already shown that vigorous oversight can be effective in stopping unjustified premium increases.

And for the first time, insurers are being held accountable for the way they spend consumer premiums. New rules require insurers to pay out 80 percent to 85 percent of premium dollars on health care and quality improvement efforts — rather than marketing and executive bonuses. Those who don’t meet this standard will have two choices: reduce rates or send customers rebates.

By holding insurance companies accountable, we are making sure families and small-business owners get the best value for their premium dollars.

We also know that individuals and small businesses have often had to pay significantly more for health insurance than big businesses, which can use their size to negotiate lower premiums. But in 2014, individuals and small businesses will be able to pool their purchasing power through new state-based health insurance exchanges to bring down their rates. Millions of people will be eligible for tax credits, based on need, to help them afford health coverage.